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AEL&P parent company and Canadian Hydro One call off merger

By ekwok on January 24, 2019

Hydro One’s logo on a tower at its headquarters in Toronto on May 20, 2015. Hydro One says it’s Canada’s largest electricity transmission and distribution service provider. (Public domain photo by Raysonho @ Open Grid Scheduler / Grid Engine)

The proposed merger between the parent company of Juneau’s power utility and a Canadian power company is dead. That’s according to Hydro One and Avista, who announced Wednesday they had terminated the deal.

Alaska Electric Light & Power was bought by Avista Corp. in 2014. The Spokane-based parent company opened merger talks with Toronto-based Hydro One in 2017.

But the merger needed approval in every state where Avista does business. Alaska’s regulators had approved the deal, but utility regulators in Idaho and Washington rejected the merger.

Both states cited fears over political meddling in Hydro One, which is 47 percent owned by the province of Ontario. Populist premier Doug Ford forced Hydro One’s CEO to resign and replaced its board of directors weeks after being elected in June.

In a joint statement, Avista and Hydro One said their boards independently decided terminating the deal would be best course of action for the companies and their shareholders.

AEL&P President Connie Hulbert wrote in a statement that the outcome of the proposed merger will not affect the Juneau utility, which serves 17,000 homes and businesses including Hecla’s Greens Creek Mine.

“It will continue to be business as usual for AEL&P,” she wrote.

Some in Juneau had raised concerns over the prospect of a foreign business owning the 125-year-old company.

Renewable Juneau, an advocacy group, released a statement applauding regulators for scuttling the merger. Andy Romanoff, who is on the nonprofit’s board of directors, wrote that the proposed merger was not in the public interest.

“Idaho and Washington regulators found, for various reasons, that the proposed merger between Canada’s Hydro One and Avista Corporation was not in the public’s best interest. We understand that finding as it is consistent with issues raised in Alaska,” Romanoff wrote. “A concern of note was the prospect of foreign control of the merged corporations and its possible implications for Juneau’s local power utility, AEL&P.”

Hydro One will pay Avista a $103 million termination fee as required by the merger agreement, the statement said.

In an email, Avista spokesperson Casey Fielder said Avista is not actively seeking any other mergers.

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